Chipotle Mexican Grill, Inc. (NYSE:CMG) stock rose 7.23% (As on February 7, 11:38:45 AM UTC-4, Source: Google Finance) after the company reported fourth-quarter results that topped Wall Street’s estimates, as consumer demand and higher prices on the menu outweighed higher ingredient costs. The company reported fourth-quarter net income of $282.1 million, or $10.21 a share, compared with $223.7 million, or $8.02 a share, during the same quarter in 2022. The company has opened 121 new restaurants during the fourth quarter with 110 locations including a Chipotlane. These formats continue to perform well and are helping enhance guest access and convenience, as well as increase new restaurant sales, margins, and returns. Food, beverage and packaging costs in the fourth quarter were 29.7% of total revenue, an increase of 40 basis points compared to the fourth quarter of 2022. Food costs increased due to a higher mix of beef as well as inflation across the menu, most notably higher costs for beef, produce, and queso. These increases were partially offset by the benefit of menu price increases and, to a lesser extent, lower paper costs. Restaurant level operating margin in the fourth quarter was 25.4% compared to 24.0% in the fourth quarter of 2022. The improvement was primarily due to the benefit of sales leverage and, to a lesser extent, lower paper costs.

CMG in the fourth quarter of FY 23 has reported the adjusted earnings per share of $10.36, beating the analysts’ estimates for the adjusted earnings per share of $9.71, according to analysts polled by FactSet. The company had reported the adjusted revenue growth of 15.4 percent to $2.52 billion in the fourth quarter of FY 23, beating the analysts’ estimates for revenue of $2.49 billion. Same-store sales increased 8.4% compared to analysts’ expectation of  a 7.1% same-store-sales gain. The sales results for the quarter were helped by a 7.4% increase in consumer transactions at restaurants and an increase in average check of 1.0%, and to a lesser extent, new restaurant openings. Digital sales accounted for more than a third of total food and drink sales. Costs for beef, produce and queso rose. Costs for paper fell.

For 2024, the company expects full year comparable restaurant sales growth in the mid-single digit range and 285 to 315 new restaurant openings, which assumes developer, permit, inspection, and utility delays do not worsen.